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Governor visits wind farm near Fairfield

Gov. Steve Bullock visited a wind farm near Fairfield on Thursday as part of a series of energy roundtables he’s conducting around the state.

Previously, Bullock conducted a solar energy roundtable in Bozeman at Simms Fishing Products and toured the building’s new solar panel array. He also toured a weatherization project at a home in Missoula and held a roundtable about energy efficiency efforts.

Bullock said he’ll use input from the roundtables to develop an energy plan he is expected to release late this month.

The state has an opportunity to expand the state’s energy portfolio, he said.

“We can help design what that energy future will look like,” Bullock said.

Bullock was scheduled to conduct another roundtable in Colstrip, home to a coal-fired power plant and a coal mine, on Tuesday.

The state’s future energy options will include coal but also wind, solar and hydro, Bullock said.

Recently, Pennsylvania-based Talen Energy, which owns a share of the Colstrip plant and operates the facility, said its role as operator is not economically viable and the plant’s five owners will need a new manager by May 2018.

“The wind is shifting under our feet when it comes to energy,” said Bullock, who conducted an energy roundtable on wind at the Montana Farmers Union in Great Falls following his visit to the wind farm near Fairfield.

The 13-turbine, 25-megawatt Greenfield project is located next to the six-turbine, 10-megawatt Fairfield Wind farm, which was completed in 2014.

Developer Martin Wilde of WINData LLC, said both wind farms are examples of smaller, community scale wind projects that involve local contractors and land owners.

“There’s great expertise in Montana for Montanans to build them,” he said.

Dick Anderson Construction of Great Falls is the general contractor. The power is being sold to NorthWestern Energy.

Allan Frankl of Dick Anderson Construction said 60 to 70 people will be working on the Greenfield project during the height of construction. Turbine components are expected to arrive later this month and be up by mid-September. The wind farm is expected to be producing power after Sept. 30.

Land owner Marvin Klinker said he’ll receive a percentage of revenue from the electricity produced at the wind farm.

A second industrial wind farm has broken ground southeast of Choteau, even as a wind farm half the size located on the new project’s western boundary was sold to a New York-based renewable energy investment company.

Teton County Commissioner Jim Hodgskiss said a Greenfield Wind LLC official, Matt Wilson, notified him that contractors would break ground during the week of March 20 for a 15-turbine wind farm next to the six-turbine Fairfield Wind project that was completed in May 2014.

The Teton County commissioners last summer approved a 10-year tax abatement for the proposed $47 million Greenfield Wind project while denying an abatement for the $19 million Fairfield Wind project.

Subsequently, Fairfield Wind appealed the state Department of Revenue’s determination that Fairfield Wind had a $19,118,781 market value. The matter is now before the Montana Board of Tax Appeals with all “discovery” documents due by April 25 and the hearing set for July 19.

Fairfield Wind’s 2015 tax bill was $323,569.83, an amount, with some later adjustments, that was paid under protest.

The Fairfield Wind farm is located in the Choteau elementary and high school districts and the proposed Greenfield Wind farm is in the Power High School and the Greenfield Elementary School districts.

Revenue officials estimated that Greenfield Wind would generate an estimated annual tax bill in the neighborhood of $863,000 under the cost approach, although with the tax abatement set for 50 percent during the first five years, local governments would receive only half of that.

Wilson works for Foundation Windpower LLC that owns a majority-member equity interest in Greenfield Wind LLC. The minority member of Greenfield Wind is Fairfield resident Martin Wilde who developed both wind farm projects under his company, WINData LLC.

Wilson and Wilde did not respond to invitations for telephone interviews.WINData has filed two lawsuits against Foundation Windpower in Teton County District Court that Judge Robert Olson recently dismissed. However, WINData has appealed the two cases to the Montana Supreme Court.

In December 2015 Foundation Windpower sold its interest in the Fairfield Wind project (the legal entity at that point was called Fairfield Wind Master Tenant LLC) to Greenbacker Wind LLC, which is a business created by Greenbacker Renewable Energy Corp. and Greenbacker Renewable Energy Co. LLC of New York, New York.

Greenbacker, in a December press release, said it acquired the Fairfield Wind project for $6,615,000 in cash and the assumption of $12,412,000 in debt for a total of $19,027,000 on Dec. 8, 2015. It is a “publicly registered, non-traded limited liability company that expects to acquire a diversified portfolio of income-producing renewable energy power plants, energy efficient projects and other sustainable investments,” according to its website.

The wind farm has two 1.6-megawatt and four 1.7-megawatt turbines. The generated electricity is sold to NorthWestern Energy under a long-term power purchase agreement that has 18.5 years remaining on the contract.

Greenbacker, citing the project as a “fund portfolio” for its investors, forecasts a 10.7 percent initial yield on the investment, but cautioned in its literature that that yield is not a measure of the fund’s performance and it is not necessarily indicative of distributions that the fund may provide to investors.

Wilde has had disputes with Foundation Windpower since mid-2015 and in court documents said he filed a notice of dissociation with the Fairfield Wind entity over Foundation Windpower’s refusal to supply him with accounting information, among other things. He refused to sign off on Foundation Windpower’s proposed monetary value of WINData’s 10- percent equity interest in Fairfield Wind and he declined to agree to the sale.

However, Foundation Windpower’s attorney Stephen Brown of Missoula successfully argued in Olson’s court in February that the operating agreement the pair of companies signed required that the dispute be brought in a California forum, not one in Montana.

Brown successfully argued a similar point when in July 2014, the Montana Supreme Court found in favor of San Diego Gas & Electric Co., (against Naturener USA that owns wind farms in Glacier and Toole counties) determining that the “consent to conduct all” provision of the first contract between the two parties required the parties to litigate all disputes Industrial wind farm has broken ground in county–pub 3-30-16– 2 pertaining to that contract in California. Brown represented San Diego Gas.

In a similar way, Olson dismissed Wilde’s lawsuit against Foundation Windpower, first in the dispute over Fairfield Wind, and second, over the Greenfield Wind

Construction of a 25-megawatt, 13-turbine wind farm seven miles north of Fairfield is back on track, according to the developer.

Martin Wilde, principal engineer at WINData LLC, said Wednesday that foundations are being poured at Greenfield wind farm.

“We’re moving ahead,” Wilde said.

Wilde is partnering with Foundation Wind Power of San Francisco in developing the project.

Dick Anderson Construction of Great Falls is the general contractor.

Towers and turbines will be erected this summer, Wilde said. The goal is to have construction completed by September.

“Our goal has been to keep money in Montana to help Montana communities leverage the wind power opportunities to the full extent,” Wilde said.

Greenfield wind farm is located next to the six-turbine, 10-megawatt Fairfield wind farm, which was completed in 2014.

Construction was halted at Greenfield last summer over property taxes.

At the time, Foundation Windpower said the first property tax bill for the existing Fairfield wind farm came in higher than expected.

Foundation Windpower then applied for tax abatements seeking tax breaks for both the operating Fairfield wind farm and the proposed Glacier wind farm.

An abatement means that the developer will receive a 50 percent tax cut over the first five years with taxes gradually increasing to 100 percent at the end of the 10th year.

Jim Hodgskiss, Teton County commissioner, said commissioners granted a tax abatement for the Glacier project because it still hadn’t been constructed, but denied the abatement for the Fairfield project because it already was completed.

About half of the total tax reduction for the Fairfield wind farm, or about $2 million, would have been shifted onto the rest of the tax rolls if commissioners would have approved the abatement after the wind farm already had been constructed, Hodgskiss said.

“We didn’t feel it was right to shift it back to the rest of the taxpayers after it was built,” Hodgskiss said.

Construction of a 25-megawatt, 13-turbine wind farm seven miles north of Fairfield is back on track, according to the developer.Martin Wilde, principal engineer at WINData LLC, said Wednesday that foundations are being poured at Greenfield wind farm.“We’re moving ahead,” Wilde said.Wilde is partnering with Foundation Wind Power of San Francisco in developing the project.

Dick Anderson Construction of Great Falls is the general contractor.Towers and turbines will be erected this summer, Wilde said. The goal is to have construction completed by September.“Our goal has been to keep money in Montana to help Montana communities leverage the wind power opportunities to the full extent,” Wilde said.

Greenfield wind farm is located next to the six-turbine, 10-megawatt Fairfield wind farm, which was completed in 2014.Construction was halted at Greenfield last summer over property taxes.At the time, Foundation Windpower said the first property tax bill for the existing Fairfield wind farm came in higher than expected.Foundation Windpower then applied for tax abatements seeking tax breaks for both the operating Fairfield wind farm and the proposed Glacier wind farm.

An abatement means that the developer will receive a 50 percent tax cut over the first five years with taxes gradually increasing to 100 percent at the end of the 10th year.Jim Hodgskiss, Teton County commissioner, said commissioners granted a tax abatement for the Glacier project because it still hadn’t been constructed, but denied the abatement for the Fairfield project because it already was completed.

About half of the total tax reduction for the Fairfield wind farm, or about $2 million, would have been shifted onto the rest of the tax rolls if commissioners would have approved the abatement after the wind farm already had been constructed, Hodgskiss said.“We didn’t feel it was right to shift it back to the rest of the taxpayers after it was built,” Hodgskiss said.

A wind farm company with out-of-date turbines that wildlife biologists blame for the deaths of scores of raptors on the Altamont Pass has agreed after years of squawking from environmentalists and regulators to replace the bird-killing blades.Altamont Winds Inc. closed down its turbines for the season, and wrote in a letter to the U.S. Fish & Wildlife Service that it had decided to “permanently shut down and cease operations” of all 828 of the power generators. The Tracy company has applied with Alameda County for a permit to replace the old equipment with 33 larger, state-of-the-art turbines that kill far fewer birds.“The reduction of avian impacts was a primary factor that influenced our decision to discontinue operating our Altamont wind farms,” wrote Bill Damon, vice president of Altamont Winds.The move was touted by environmental organizations as a big victory in the battle to protect golden eagles, other raptors, birds and bats, thousands of which are pulverized every year by the spinning blades that are visible to drivers in the hills between Tracy and Livermore.Declaring victory“It is a victory because this company is probably the most egregious actor in the Altamont,” said Cindy Margulis, the executive director of the Golden Gate Audubon Society, who said 67 golden eagles were killed by Altamont Winds turbines between 2004 and 2014. “We’re thrilled they are going to stop running the old turbines and that those turbines won’t be killing birds anymore.”All wind farm operations on the Altamont are required to shut down operations between Nov. 1 and Feb. 15 as part of a 2007 settlement agreement with the Audubon Society in an attempt to reduce the death toll.Rick Koebbe, president of the company, did not return phone calls. The East County Board of Zoning Adjustments is expected to decide Nov. 19 whether to approve the company’s replacement plan.Altamont Pass, just east of Livermore, is both the birthplace of the modern wind power movement and the deadliest spot in the United States for eagles and other birds, according to wildlife biologists.The wind turbines, which spin on many different parcels and are owned by a variety of companies, were first built in the wake of the energy crisis in the 1970s. At their peak, there were nearly 6,000 turbines in operation. The machines, the tips of which reach speeds of 179 mph, killed about 10,000 birds, including 2,000 raptors, every year.Unusual adversariesThe pass now contains about 3,000 turbines — representing about a third of California’s wind power and producing enough power to light San Francisco. It has been the epicenter of a long-running battle between two green movements that make for unusual adversaries — renewable energy and wildlife conservation.“It’s all about trying to strike that balance,” said Sandra Rivera, the assistant planning director for the Alameda County Planning Department.The number of eagles killed by windmills is decidedly out of balance, according to wildlife advocates. Researchers say the problem is that eagles are so intent on finding prey, and are so programmed by evolution, that they simply cannot see the spinning blades.But eagles aren’t the only flying predators that get nailed by windmills. Burrowing owls, red-tailed hawks, American kestrels and bats are also killed. The problem is particularly acute during the winter, when huge numbers of birds migrate to the area. About 35 golden eagles are killed annually in the Altamont Pass, which has one of the densest nesting populations of big raptors in the world.Greater efficiencyThe new turbines stand as tall as 430 feet and produce as much energy as 23 of the old ones, which were lower to the ground. Where they are installed within the contours of the hills is also important, and a team of researchers has been working on a chart that wind farm operators can use to better position their turbines to avoid raptor flight paths.The safety measures appear to be working. A recent study suggests that the number of raptors killed at Altamont each year has fallen about 50 percent since 2005. In 2014, bird mortality in general decreased by 25 to 40 percent, biologists say.But the 828 turbines operated by Altamont Winds were between 30 and 40 years old, making them less efficient power generators and more efficient bird killers. The Fish and Wildlife Service said 31 golden eagles have been killed by the company’s turbines since 2010.‘The sooner … the better’Still, the company got permission from the county in 2005 to continue operating its turbines in the Altamont until 2015, as long as they began replacing them. And despite heavy opposition, including from county staff, the Alameda County Board of Supervisors this spring extended the company’s deadline, this time until 2018.With Altamont Winds’ new application, Rivera said, all the current operators in Altamont have either replaced their old equipment or have submitted applications for repowering projects. Once the old turbines are remove

Wind production during the second quarter was below normal across most of the western U.S. and Mexico, according to Albany, N.Y.-based AWS Truepower’s quarterly wind bulletin.According to AWS, winds were below normal across most of the western U.S., Mexico, India and the Philippines but above normal across most of Central and South America, Europe, and the Pacific Ocean and vicinity.Overall wind speeds across much of the U.S. rounded out the quarter well below normal – continuing the pattern from the previous winter, according to AWS, which notes that the Northeast through Midwestern and Appalachian states experienced higher-than-normal wind speeds through the quarter.As for Mexico, AWS notes that most of northern Mexico experienced winds less than 10% to 20% below the norm. Strongly above-normal wind speeds persisted to the south from the Yucatan Peninsula down through South America and into northern Brazil as well as the extreme south of the continent.

On Monday, President Barack Obama and U.S. Environmental Protection Agency (EPA) Administrator Gina McCarthy announced the roll-out of the Clean Power Plan (CPP) imposing carbon dioxide (CO2) standards on existing power plants. Given the intent of reducing CO2 emissions by 17% below 2005 levels by 2022 and 26% to 28% below 2005 levels by 2025, these rules will have a significant impact on industrial consumers of electricity, as well as on developers of fossil-fuel-fired and renewable (e.g., solar, biomass and wind) generation.

Obama has repeatedly stated his determination to regulate the roughly 40% of the nation’s greenhouse-gas (GHG) emissions that come from the energy sector. The EPA proposed rules on June 18, 2014, that would impose a complex program for regulating existing power plants. Monday’s rule brings the first stage of this rulemaking closer to a conclusion. Although the most attention is on the rules applicable to existing power plants, rules for regulation of CO2 from new and modified facilities is traveling in lockstep with the existing source rules.

Section 111(d) differs from the EPA’s conventional rulemaking authority. For new and modified power plants, the EPA simply issues standards (under CAA Section 111(b)) that are directly applicable to all new and modified affected facilities. The EPA proposed CO2 standards under CAA Section 111(b) for new power plants in January 2014 and for modified power plants in June 2014. The EPA’s 111(d) authority is more circumspect. Rarely employed, Section 111(d) grants the agency the authority to issue emission guidelines that then must be used by the states to craft programs that are consistent with the EPA’s stated objectives. These state programs must then be approved by the EPA. However, the guidelines are just that – options for how to create a program and not outright mandates as to what the state rules must entail. The EPA issued 111(d) standards for existing, unchanged power plants Monday that seek to establish a unique program unlike any other existing regulatory program.

The CPP establishes state-specific CO2 emission limits and requires that the states demonstrate how they will achieve those limits by the deadlines in 2022 and 2030. The concept of two-stage limits matches what was proposed in 2014. However, the EPA has extended the deadline for compliance with the initial standards from 2020 to 2022; the second-stage deadline remains unchanged at 2030. The CO2 limits are applicable to existing coal- and oil-fired power plants, as well as existing natural-gas-fired combined-cycle generating facilities – a change from the 2014 proposal.

In establishing its plan to comply with the 111(d) mandate, a state can choose to comply with one of three types of limits. First, and consistent with the 2014 proposal, a state can adopt a pound per megawatt-hour (lb/MWh) limit. Second, a state can adopt a total ton per year (tpy) CO2 cap that would apply within the state. This option was also discussed in the 2014 proposal, but no values were suggested for individual states. Third, a state can adopt a tpy CO2 cap that includes an allowance for new sources. Once the limit is established, a state must develop and implement a plan to achieve the limit. This plan can consist of either a conventional limit applicable to the electrical generating units covered by the CPP (i.e., coal- and oil-fired power plants and natural-gas-fired combined-cycle units), or it can reach “beyond the fence,” incorporating other CO2 reductions and taking credit for those when calculating compliance. It is the utilization of these “beyond the fence” measures, such as renewable energy standards and residential energy efficiency programs, to demonstrate compliance with standards applicable to power plants that fostered a lot of questions in 2014 as to the legality of the program. The EPA is also requiring a hard “backstop” limit that will automatically kick in and apply to individual regulated electrical generating units if the state program fails to achieve its intended “beyond the fence” reductions.

The EPA is clearly trying to promote nationwide or regional cap-and-trade programs. The final rules promote emissions trading mechanisms and discuss the CPP enabling states to generate “trading ready” allowances that avoid the need for interstate agreements. Expanding on language in the 2014 proposal, the EPA speaks of individual power plants being able to meet their obligations through emission rate credits (if a rate-based standard is adopted) or allowances (if a mass-based standard is adopted). Cap-and-trade was a clear element underlying the 2014 proposed rule, but it takes on a more prominent role in the final rule.

Implementation of the program will take place over the next 15 years. As noted above, each state has a limit it must attain by 2022 and a more stringent limit by 2030. Many of these limits have changed dramatically from the 2014 proposal (e.g., the 2030 limit for Washington increased from 215 lbs CO2/MWh to 983 lbs CO2/MWh, while North Dakota decreased from 1,783 lbs CO2/MWh to 1,305 lbs CO2/MWh). Each state must develop a plan for how it will attain these limits that must be reviewed and approved by EPA. If a state fails to propose a plan or the EPA disapproves the state’s plan, then the agency will impose requirements in that state. The initial submittals are due by Sept. 6, 2016. This initial submittal can consist of either a state’s final plan or an initial plan with a request for an extension. By Sept. 6, 2018, all final plans must be submitted. These plans must identify milestones used to demonstrate progress toward achieving the CO2 reduction goals.

The rules create the Clean Energy Incentive Program (CEIP), which provides an interesting opportunity for renewable energy developers. The CEIP allows states a mechanism to reward wind and solar projects that commence construction after a state submits its 111(d) plan to the EPA (or after Sept. 6, 2018, for states that choose not to submit a final state 111(d) plan by that date).

A project must be either located in a state or benefit a specific state to be eligible under the CEIP as part of that state’s 111(d) program. The states are required to include a CEIP implementation regimen in their 111(d) plan and account for allowances (if a mass-based plan approach) or emission rate credits (ERCs) if a rate-based plan approach. If the state does so and the wind or solar project commences construction after the state plan is submitted, then the project earns ERCs or allowances based on the quantity of metered megawatts generated in 2020 and 2021. Among renewables projects, only wind and solar are eligible. For every metered MWh generated in 2020 and 2021, the project will receive one ERC (half from the state and half from the EPA). Even states or tribal areas without any regulated generating units may provide ERCs so long as they are connected to the contiguous U.S. grid and meet certain eligibility requirements. The ERCs or allowances can be used for compliance by a regulated generating unit and are fully transferable prior to such use. A nationwide cap of 300 million tons of CO2 ERCs/allowances applies to the CEIP program (and includes ERCs/allowances awarded to low-income energy efficiency projects that reduce electricity usage in low-income communities in 2020 and/or 2021). In order to be eligible for the ERCs/allowances under the CEIP, developers are not required to demonstrate that their project is “additional” or surplus relative to a business-as-usual or state-goal-related baseline. Many questions abound about how the CEIP will work, and the EPA does not address them in Monday’s rule. Instead, the agency plans to issue another rule with the details of the CEIP.

Stay tuned as this process unfolds in the next few days, weeks and years. The EPA’s issuance of the rules shifts the burden to the states to develop plans and triggers further rulemaking to flesh out requirements like the CEIP. There will be opportunities to get involved in the federal rulemaking, as well as with state rulemaking efforts as the states navigate this maze of requirements and work to meet the tight deadlines.

Tom Wood is a partner at Stoel Rives LLP, where his practice focuses on the Clean Air Act.